Bitcoin Hits Supply Wall at $81K-$86K as Rally Falters
Bitcoin is facing a crucial test as it approaches a densely packed supply zone between $81,000 and $86,000. According to Glassnode, this range contains multiple layers of potential selling pressure, including long-term holder breakevens, self-custody supply, and options positioning.
The recent rebound has been driven by the U.S. Treasury's expanded bond buyback program and a short squeeze on August 19, which was the largest since 2019. However, Glassnode warns that this rally may now depend on whether fresh demand can absorb the overhead supply without losing momentum.
The recent short squeeze cleared much of the leverage that helped drive Bitcoin higher, cutting available short-liquidation fuel by 86% and reducing futures open interest by 11%. This leaves Bitcoin less dependent on leverage but also removes a major source of mechanical buying.